Who Leaves the Promised Land? Employer Status and Entrepreneurial Mobility

• In Event: 118 - Section on Economic Sociology Refereed Roundtable Session and Business Meeting
  In Refereed Roundtable 60min: Table 09. Entrepreneurship, Laboring, and Mobility

Abstract

Research in economic sociology has long established that actors of unknown quality benefit greatly from obtaining high-status affiliations. Further, status advantages from these affiliations are magnified in times of considerable uncertainty, when quality is especially difficult to define. Given the inherent uncertainty of entrepreneurship, this has led to an often suggested relation-ship between an entrepreneur’s status affiliations and their likelihood to become an entrepreneur. This stems from the fact that high-status affiliations provide important resources to entrepreneurs and that the entrepreneurs we observe have often worked at prestigious employers. In this paper, we focus on status affiliations gained from the employer-employee relationship. We argue that high-status employment is valued, and that when the entire population of employees is considered, instead of just those who choose to pursue entrepreneurship, there will be a negative relationship between high-status employment and entrepreneurial entry. We further hypothesize that this effect will become positive when only those employees who have chosen to leave paid employment are considered. Further, we argue that this high-status affiliation is most useful for those employees with ambiguous quality.

Authors

• Tristan L. Botelho, Massachusetts Institute of Technology

• Aleksandra Joanna Kacperczyk, MIT Sloan School of Management